Despite significant economic and political uncertainty, even before the global pandemic, the number of tech start-ups emerging in the UK continues to grow. In particular, FinTech, who as a sector, last year saw £37.4 billion poured in by global investors (almost double the investment from 2018). And only back in March we heard the UK’s Chancellor of the Exchequer, Rishi Sunak, announce “a major review” of this booming sector which will look at how the government can best support growth and competitiveness amongst start-ups. Whilst we can’t predict the Government’s re-ordering of priorities in the “new normal” as they grapple with the economic shockwaves from Covid-19, the demand for digital solutions has accelerated.
But whilst every entrepreneur behind these companies has an appetite to take them through to their next stage of growth, we still see 9 out of 10 start-ups fail. They may have already achieved a lot and have some proven success stories but scaling up is a different ball game and by no means an easy process. It is a distinct and significant phase of company growth and one which brings plenty of hurdles and challenges along the way such as hiring the right team, customer acquisition and the biggest killer at 74% - premature scaling. Particularly as investors are likely to adopt a more cautious approach as we emerge from the pandemic.
Whilst there is a proliferation of advice and support for start-ups, scale-ups need greater access to guidance to overcome the unique challenges through this growth phase.
Companies like Whitecap Consulting help organisations with their growth strategies and Director Julian Wells recommends early state businesses partake in accelerator programmes.
“They can provide structure, support and challenge to start-ups. A BEIS survey last year of 428 start-ups that have participated in an incubator or accelerator found that most considered the programme to have been significant or vital to their success. The start-ups perceived direct funding to be the most useful support they received as part of the programme. This was followed by access to office space, lab space and technical equipment.”
In growth mode, it is important that you don’t try and do everything yourself.
You may have been used to multi-tasking as part of a very small team in start-up mode, but when you’re looking to scale, this will prove to be impossible. Be honest with what you’re good at and learn the art of effective delegation. It’s one of the hardest things a business owner has to do – you’re giving up control of your “baby” and entrusting your reputation on someone else but you’re also learning to collaborate and communicate better and learning from others may throw up different perspectives and opportunities for the future of your business.
Gavin Powell, General Secretary for FinTech Wales emphasises the importance of having resilience.
“As your company scales and becomes more efficient it will also become more reliant on automation, systems and processes. You need to make sure these are both flexible and robust to provide you with the needed resilience. If not, your scaling will just add fragility and risk and will likely fall apart at the first hint of disruption.”
Focus on matching tasks to skillset and hiring in talent for specialist areas such as Accounting and Marketing. Embracing a diversity of talent and ideas can help your start-up scale beyond its initial market and business plan. It is also important that business founders stop and look from the outside in and through your customers’ eyes. When you’re scaling, everyone’s very busy, but they could be busy doing things inefficiently. This customer-centric approach will help organisations stay ahead of the market and be responsive to change and thrive.
With constant changes and developments happening as you scale, don’t lose sight of your vision and key differentiators. You’re likely to encounter culture change as you bring in new talent which can be difficult to manage but if you can embed your vision, values and mission in everything you do, it will help to create a Future Focused, resilient and positive culture.
Even with different departments and personalities, you’ll want everyone to share the same enthusiasm, vision and values that define your business.
There will be challenges and hurdles but make sure you are open for innovation, redesign and transformation. Think about Google – in much of its early years it didn’t have a profitable business model even though it was a popular search tool. But in 2003, it radically changed direction launching AdWords which catapulted them to multi-billion dollar success.
Companies like Google, PayPal, Facebook, Amazon and Apple have all thrived by changing their direction and strategy.
So, scaling your start-up brings significant risk but it also opens so much opportunity. Yes, there are going to be challenges, headaches and closed doors but start-ups that grow at a sustainable pace, hire the right talent, spend wisely, understand their customers, maintain their vision and are open to change are going to be the ones destined for maximum success, longevity and sustainable growth.
At TBT Marketing we help customers in the tech industry maximize their chances for success by understanding where to identify your value-add to the market, and amplifying your brand potential, aligned to your business goals.
Call us now on +44 (0)1373 469270 or email us at [email protected].